VAT Plants according to the Theory Of Constraints - Online course extract

The VAT factory types are the Theory Of Constraints’ classification system of the different kinds of industrial manufacturing systems, they determine how plants should be analyzed and how they should be managed.

This video is an extract of the course “Theory Of Constraints in production” by Philip Marris, the CEO of Marris Consulting.

The VAT system was developed in the 1980s when Eliyahu Goldratt and his team were selling a scheduling software system called OPT based on differentiating between bottlenecks and non-bottlenecks.

TOC solutions in manufacturing are different for V-plants, A-plants, and T-Plants.

The letters represent the Bill Of Materials but where the flow is from bottom to top (the opposite of most representations of flow). The raw materials and purchased components are at the bottom and the Finished Goods are at the top. Products flow upwards.

The V-Plant has few different kinds of raw materials compared to the wide range of finished goods that it produces. These are often continuous or semi-continuous process industries. For example, in a steel plant, different types of steel are transformed into different thicknesses, different hardnesses and different widths of sheets of steel. Or in the food industry milk will be transformed into different kinds of milks and yogurts.

The second type is the A-Plant. It is the opposite of the V-plant. Many different raw materials and purchased components are assembled to produce a limited range of finished goods. These can be Original Equipment Manufacturers for instance (OEMs). A manufacturer of windscreen wiper engines for cars for instance. Or the Apple iPhone manufacturing: many different components but a limited range of end products offered to the market.

The third kind of production model is the T-plant, or the “modern assembly plant”. It has emerged because an A-plant cannot personalize its products, so the market offering is limited in its range. So this has led to the T-plant. The vertical bar of the T-plant makes some of the components (via a combination of V and A plants) and the horizontal bar of the T represents the assembly. The assembly is based on a logic of options and variants. It assembles components built in-house and purchased components (or sometimes only purchased components). The best-known example is the production of a car. The engine and other key components will be manufactured (A-Plants) the sheet metal of the doors will be produced (V-Plants) and then the final assembly plant will offer a nearly infinite combination of cars with different engines, different colours, different seats, different entertainment systems, etc. So, a T-Plant can offer a wide variety of products with a short lead-time. That is why the T-plant has become the dominant model for assembled p